Kuwait is a small, rich, relatively open economy with self-reported crude oil reserves of about 104 billion barrels – 8% of world reserves. Petroleum accounts for nearly half of GDP, 95% of export revenues, and 80% of government income.

Kuwait experienced rapid economic growth over the last several years on the back of high oil prices and in 2008 posted its tenth consecutive budget surplus. As a result of this positive fiscal situation, the need for economic reforms was less urgent and the government did not push through new initiatives.

The drop in oil prices in late 2008 will reduce Kuwait’s fiscal surplus in 2009. The global financial crisis may slow the pace of investment and development projects, but Kuwait has vowed to use its considerable financial resources to stabilize the economy if necessary.